The ship was rebuilt and commissioned into the People's Liberation Army Navy (PLAN) as Liaoning on 25 September 2012. Its Chinese ship class designation is Type 001. In November 2016, the political commissar of Liaoning, Commodore Li Dongyou, stated that Liaoning was combat ready.[6]

The Kuznetsov-class ships were originally designated by the Soviet Navy as "тяжёлый авианесущий крейсер" (tyazholiy avianesushchiy kreyser, TAKR or TAVKR), meaning "heavy aircraft-carrying cruiser". In addition to aircraft, the ships were designed to carry P-700 Granit anti-ship cruise missiles that also form the main armament of the Kirov-class battlecruisers. This multirole capability allowed the ships to pass through the Turkish Straits between the Black Sea and the Mediterranean Sea. Under the Montreux Convention, aircraft carriers are restricted to 15,000 tons, but there was no displacement limit on capital ships from Black Sea powers.[7][8]

The People's Liberation Army Navy considers Liaoning to be an aircraft carrier.[9] Since China is not located on the Black Sea, it does not need and cannot use the tonnage exemption for capital ships. The ship was completed as an aircraft carrier, and cruise missiles were never installed. Liaoning is equipped only with air defense weapons and must use its aircraft for surface attack.

Ukraine approached China, India, and Russia as potential buyers.[1] China sent a high-level delegation in 1992, which reported that the ship was in good condition and recommended a purchase. However, the Chinese government declined to purchase the ship because of the international diplomatic situation at the time.[13] Unable to find a buyer, Ukraine left the ship to deteriorate in the elements.[14]

In 1998, the rusting hulk was sold at auction for $20 million to Agencia Turistica E Diversoes Chong Lot Limitada, a company from Macau. Chong Lot proposed to tow Varyag to Macau, where the ship would be converted into a $200 million floating hotel and casino.[15] Western observers were suspicious, since Chong Lot had no listed telephone number, was not located at its listed address, and was run by former officers in the Chinese Navy. Officials in Macau also denied Chong Lot's application to operate a casino. However, analysts noted that Varyag had deteriorated too much to be used as an operational warship and pointed out that the Chinese Navy was concentrating on submarines.[11][14] The Soviet carriers Kiev and Minsk had also been sold to China as tourist attractions.

In January 2015, further details emerged in an interview with Xu Zengping by the South China Morning Post. Xu reported that he had been commissioned by the PLAN to purchase the vessel on its behalf, with the floating hotel and casino as a cover story. He was warned that the Chinese Navy did not have the budget to buy the ship, and the Chinese government did not support the purchase. However, Xu was so impressed when touring the ship that he resolved to purchase it using his personal funds. The previous year, Xu had borrowed HK$230 million from a Hong Kong business friend, spending HK$6 million to create Chong Lot as a Macau shell corporation. He described a harrowing negotiation in Kiev, lubricated by bribery and liquor, which helped to arrange victory at the auction. As a precaution, he shipped 40 tonnes of the carrier's blueprints to China overland in eight trucks.[13]

The passage from Ukraine to China was even more problematic than the purchase. In June 2000, Varyag was taken under tow. As the tugboat approached the Bosphorus, Turkey denied permission for the ship to pass through, citing the risk that a gust of wind would turn the ship widthwise and block the entire strait. Varyag spent the next 16 months being towed counterclockwise around the Black Sea, accruing towing charges of $8,500 a day as Chong Lot stopped paying its bills. The tugboat operator compared its fate to the Yellow Fleet that was stuck in the Suez Canal for eight years, and French thrillseekers even landed a helicopter on the ship.[14] Meanwhile, Chinese officials negotiated with Turkey, offering trade and tourism concessions.[16]

In August 2001, Turkey relented and agreed to allow the ship to pass. On 1 November 2001, the Bosphorus was cleared of all other traffic as Varyag was towed through.[16][17] On 2 November, Varyag also passed through the Dardanelles without incident. On 4 November, Varyag was caught in a force 10 gale and broke adrift while passing the Greek island of Skyros. The ship was finally taken back under tow on 6 November, after one sailor died while attempting to attach the tow lines.[18][19]

Xu Zengping estimated in 2015 that his total out of pocket cost was at least US$120 million. He insisted that he had never been reimbursed by the Chinese government, and had spent the last 18 years repaying his debts, in part by selling properties such as his palatial home. A source familiar with the acquisition explained that many of the naval officials initiating the mission had either died or were in prison.[20]

Contrary to initial reports that the ship had no engines, Xu reported that all four original engines remained intact at the time of purchase, but had been shut down and preserved in grease seals.[21] A refit restored them to working order in 2011.

701st Institute was tasked to redesign Varyag with Zhu Yingfu (朱英富) and Wu Xiaoguang (吴晓光) were assigned respectively as the general designer and deputy general designer. Wang Zhiguo (王治国) was assigned as the general system engineer, and Yang Lei (杨雷) was assigned the general supervisor.[22] Workload of converting Varyag for operational use was equivalent to building ten new destroyers.[22]Varyag was moved in June 2005 to a dry dock at Dalian (38°56′06″N121°36′51″E﻿ / ﻿38.935°N 121.6141°E﻿ / 38.935; 121.6141﻿ (Varyag)). Her hull was sandblasted, scaffolding erected, and the ship's island was painted in a red marine primer to treat metal corrosion.[23]

On 8 June 2011, General Chen Bingde made the first public acknowledgement of the ship's refit.[25] On 27 July 2011, the Chinese Defense Ministry announced it was refitting the vessel for "scientific research, experiment and training".[26]

The ship undertook her first sea trials from 10 August 2011 to 15 August 2011.[27] On 29 November 2011 the carrier left port for her second set of trials.[28][29][30] The carrier completed her eighth sea trial between 7 and 21 June 2012 and returned to Dalian. In July 2012, the ship set out for the longest trials thus far, 25 days.[31] The carrier completed sea trials in early August 2012 and loaded Shenyang J-15 aircraft and KJ-88, YJ-83K, and YJ-91 missiles in preparation for weapons systems trials.[32]

During sea trials, Liaoning experienced a steam burst in the engine compartment which forced crew to evacuate some parts of the ship, and the ship lost power. The problem was ultimately resolved and power was restored, although the time duration of the problem has not been released by military officials.[33] Her sister ship Admiral Kuznetsov has also been disabled several times by engine failures.

On 23 September 2012, the aircraft carrier was handed over to the PLAN, and was commissioned on 25 September 2012.[34] At the commissioning ceremony, the carrier was officially named Liaoning, in honour of the province in which she was retrofitted.[35][36] On 26 December 2012, the People's Daily reported that it would take four to five years for the Liaoning to reach full capacity.[37] As it is currently a training ship, Liaoning is not assigned to any of China's operational fleets.[38]

In August 2014, based on an article from Chinese state media, western news outlets reported that two pilots had been killed testing jets slated to operate from Liaoning.[50][51] Chinese military officials stated such reports were misleading, and clarified that deaths were in fact unrelated with tests on the carrier.[52][53] The original Chinese article from Xinhua also did not link the deaths with the J-15 nor mention any loss of such aircraft.[54]

In August 2014, the Chinese-language Shanghai Morning Post listed that Liaoning would carry 36 aircraft: 24 Shenyang J-15 fighters, six Changhe Z-18Fanti-submarine warfare (ASW) helicopters, four Changhe Z-18J airborne early warning helicopters and two Harbin Z-9C rescue helicopters. The Chinese carrier aircraft inventory is similar to a balanced combat and support aircraft approach intended for Soviet aircraft carriers, which supported nuclear submarines, large surface combatants, and land-based strike bombers performing anti-access roles. The air wing lacks long-range radar and anti-submarine fixed-wing aircraft, needing support from shore-based aircraft such as Tupolev Tu-154 ASW and Shaanxi Y-8 AWACS aircraft. The U.S. Department of Defense noted that J-15s will have below normal range and armament when operating from the carrier, due to limits imposed by the ski-jump takeoff system.[55] The lack of a carrier onboard delivery aircraft like the United States Navy (USN) Grumman C-2 Greyhound also limits logistics capabilities. Liaoning would need extensive land-based support to oppose a USN carrier strike group; however, it would be potent against the Vietnam People's Navy and the Philippine Navy. Deficiencies will likely be corrected with future aircraft carriers, which are expected to be larger with conventional takeoff decks and catapult launching for heavier fighters, plus fixed-wing radar and anti-submarine patrol aircraft.[56]

^ abc"Ukrainians Slice Up Carrier Ulyanovsk". Defense News. 21–27 September 1992. A second aircraft carrier is 68 percent complete and lacks electronics, weapons systems and aircraft, but sale of the carrier to India or China "is a fairy tale scenario," said Antonov. Russia is the only realistic potential purchaser.

^Blanchard, Ben (29 December 2016). Birsel, Robert, ed. "Come and have a look, China says as carrier skirts Japan". Reuters. Archived from the original on 29 December 2016. The Soviet-built Liaoning, accompanied by several warships, this week travelled through the passage between the Japanese islands of Miyako and Okinawa and into the Pacific for what China has described as a routine exercise.

^LaGrone, Sam (19 June 2013). "China Carrier Starts Second Round of Jet Tests". USNI News. United States Naval Institute. Archived from the original on 3 December 2013. Retrieved 14 December 2014. The Chinese are being trained in carrier aviation—the most complicated military aviation operations—by a cadre of Brazilian carrier pilots.